WASHINGTON: It is too early to tell the economic toll from the virus outbreak in China, but the hit to global growth should be “mild,” International Monetary Fund chief Kristalina Georgieva said on Thursday.
The death toll from the new coronavirus epidemic in China has climbed past 1,350, but hopes have risen that the outbreak could peak later this month.
The IMF is expecting a “V-shaped impact,” with a sharp decline in activity in China followed by a sharp recovery, meaning there likely will only be a “mild impact on the rest of the world,” Georgieva said on CNBC.
But she cautioned: “It is still too early to make projections,” and the global economy is “somewhat less strong” than it was when China faced the SARS virus epidemic in 2003.
“China was different, the world was different. This virus is clearly more impactful and the world economy then was very strong,” she said.
The IMF projects China’s economy will grow 6.0 per cent this year, compared to 10pc in 2003.
US officials likewise are reluctant to provide forecasts but say the impact on the American economy probably will be short-lived.
“There’s no question it’s having a significant impact in China,” Treasury Secretary Steven Mnuchin told legislators on Wednesday. But for the US economy “I don’t expect that the coronavirus will have an impact beyond this year.”
He echoed the comments from Federal Reserve Chairman Jerome Powell, saying, “we’re obviously monitoring very carefully.”
Published in Dawn, February 14th, 2020